Nepal’s Economic Frugality: From Bottled Water To Car Mobil

Now the central bank has taken a strict policy on re-loaning. There is a high risk of sinking the country due to short-term debt. Nepal has taken long-term and subsidized foreign loans.

Jan. 22, 2023, 3:28 p.m.

The Government of Nepal has introduced procedures related to making public expenditure effective in 2077, 2078, but our experience is that the implementation is very lax. Perhaps in 2079, we can expect some new things to come along with amendments to the previous Procedures and or Guidelines related to making public expenditure more effective. . Looks like not using bottled water, not giving extra allowance etc. have become public recently.

The Ministry of Finance is going to discourage bottled water in the office. For the current financial year (FY) 2079/80, the Ministry of Finance has introduced such a policy while making standards related to reducing expenses.

In the budget of the current financial year, it is mentioned that the current administrative expenses of government agencies will be reduced by at least 15 percent.In implementing the same point, MOF said that it has created a standard. According to the Ministry of Finance, the employees will no longer get the benefits given for working overtime during budget preparation. However, the ministry has also said that it has been decided to give only 50 percent if there is a situation where it has to be given. Explaining the situation that has to be given, do not fall short for the effect of yes. Why can't names be written on government-owned vehicles? Also, non-essential visits are discouraged According to the Ministry of Finance, the policy of discouraging non-essential visits will also be adopted. MoF has also decided not to keep stock of goods that are used sparingly and frequently, except for essential ones.

The Ministry of Finance has also decided to change the lubricant and lubricant only when necessary during the servicing of two-wheeled and four-wheeled vehicles. The ministry is also going to adopt a policy of giving priority to the website by reducing the number of budget-related books or other books that are printed regularly. The Ministry of Finance has also decided not to hold seminars and training except for the most necessary.It is also mentioned in the standards that the program must be held in the office of the ministry or in the building of the government agency.

Revision of the program and postponement of unnecessary programs after reviewing the approved programs for the current financial year, the programs that are not necessary will be postponed this year.

The Ministry of Finance is now engaged in the half-yearly review of the budget.It is mentioned in the criteria that the program will be postponed even if the approved program is not reviewed.

The standard also mentions not to use AC, heater and fan inside the office unless absolutely necessary.It is also written in the standard to refill the toner and cartridge used in the office.

Non-performance of contract

The Ministry of Finance has also decided not to work on contracts and wages other than those included in the approved positions and programs.It is also mentioned in the standard that the meetings of the ministry should be held during office hours. According to the Ministry of Finance, this standard is for internal purposes of the Ministry. Homework is also being done to reduce the running costs of the entire government agency.

In Nepal, the current expenditure has increased significantly in the first 6 months of the current financial year 2079/80. The revenue has decreased and the revenue is only reaching to meet the salary.

The capital expenditure is decreasing more and more. Due to the fact that the revenue is much less than the target, there is a huge gap between the government's income and expenditure.

To reduce this, the Ministry of Finance has prepared and implemented standards within the Ministry. Fiscal austerity, a term denoting harshness or austerity, is used in economics to refer to economic austerity measures. These are economic policies implemented by governments to reduce public sector debt, through significant cuts in government spending, especially when a nation appears to be in danger of defaulting on its "bonds".

Austerity measures refer to economic policies implemented by governments to reduce public debt and reduce government spending to reduce budget deficits. Policies considered austerity measures include tax increases, cuts in government programs, such as health care and assistance to veterans, cuts in pensions, and cuts in government employee salaries and wages.

With the coming of the current government, the topic of public expenditure reduction is mentioned even in the policy priorities and minimum programs announced by the government of Nepal.

In the program, it is mentioned that office operating expenses including purchase of vehicles will be reduced this year.

The program also mentions that the opening of new agencies in the current year will be prohibited except in special cases.

It is also mentioned in the program to abolish unnecessary structures with dual roles. According to Finance Minister, the government of Nepal is doing its homework on reducing public expenditure.

Generally, depending on how austerity measures are implemented, they can make life difficult for citizens due to less available social services and less “disposable” income. Austerity measures, which are considered strict implementation of economic policy, are aimed at reducing the government's budget deficit.These policies can take many forms, such as reducing government spending and raising taxes.Because austerity measures are considered a component of contractionary fiscal policy, they are only implemented in desperate times, often when the government is about to default on its debt.

When the government raises its taxes, it generates more revenue.When the government cuts its spending, it has more money to pay its debts.

Reducing government spending can have many consequences.This usually results in cutting non-essential programs. These include cutting or freezing the salaries of government employees, cutting government programs, such as programs for senior citizens, the homeless, and national parks, work freezes, and freezes on nonessential spending.

Although austerity measures may control government budgets, they make the daily lives of citizens difficult.The government's seemingly contradictory policies - promising austerity measures to control administrative costs while massive increases in the recurrent budget - appear to be aimed primarily at influencing the upcoming federal and provincial elections, experts say.

In order to control the unnecessary expenses incurred in the purchase of vehicles, fuel consumption and their maintenance, the government introduced the Austerity Guidelines in Public Expenditure-2018.But in the financial year 2017-18, the government spent 6.61 billion rupees on the purchase of vehicles.

According to the annual report, the number of four-wheeled vehicles in some ministries was excessive compared to the number of authorized level employees. For example, the number of authorized level employees in the Ministry of Home Affairs was 90, but the number of four-wheelers was 174.

Although the government introduced a new austerity plan last October with measures to reduce expenses in areas such as vehicle purchase, fuel use, meetings, and travel, the question remains whether it will be implemented or not. However, the new budget should talk about various austerity measures.Loans given for the revival of troubled businesses in Nepal were not only spent on such business revivals. Instead, the businessmen invested in other unproductive activities because they got loans at cheap rates. That's the reason why the economy is in trouble, according to some people. Now the central bank has taken a strict policy on re-loaning. There is a high risk of sinking the country due to short-term debt. Nepal has taken long-term and subsidized foreign loans.

On the whole, the austerity that Nepal should take is not just a matter of direction, but rather, it should be applied to the economy. In the current environment, there is a need and imperative to make the implementation effective, considering the harsh situation in which the current expenditure will increase but the revenue will decrease.

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